Meet the Private Equity Tycoon at the Forefront of America’s New Phony Philanthropy

There used to be a thing we called “philanthropy.” Even though the concept of corporate-funded charity has raised thorny ethical questions since its Gilded Age birth (asking, for example, why companies give money away while workers struggle), the idea historically at least had some coherence. Industrial titans like J.D. Rockefeller and Andrew Carnegie took profits from their firms, however troubled their origins, and generally channeled them toward the disadvantaged and afflicted, funding public libraries, museums and disease research among other socially useful projects. The rich, in other words, idiosyncratically and undemocratically, gave to the poor.

In our new Gilded Age, however, even this arrangement seems like a golden vision from a picture-book past.

Stephen Schwarzman, the private equity tycoon who cofounded the Blackstone Group, is the face of a new kind of philanthropy. To borrow the language of Silicon Valley and Wall Street, he has “innovated” novel ways in which the rich can give back to themselves, cementing and heightening their power while claiming they’re doing the rest of us a favor. Ostensibly charitable ventures need no longer benefit the disadvantaged at all; they just need to be marketed that way.

In the late ’90s, even before he amassed much of his $6.5 billion fortune, Schwarzman conducted an early trial of this idea at his alma mater Yale, proposing a $17 million donation in exchange for renaming the freshman dining hall for him. The offer was ultimately turned down after Yale discovered it was actually “a contribution to one of Blackstone’s investment partnerships on Yale’s behalf.” The university wouldn’t receive money until the fund was liquidated, essentially exposing it to a bet on the donation’s ultimate size. Years later, Schwarzman found more success with a $100 million gift to the New York Public Library, but only after a dispute over how many times his name would be engraved into its faÃ§ade, another brand-building gambit that soured in the end.

Still, these million-dollar overtures seem trivial in comparison to Schwarzman’s latest and largest philanthropic project, a postgraduate China scholarship aptly titled the “Schwarzman Scholars” program. Based at Beijing’s Tsinghua University, the initiative will offer 10,000 students over the next 50 years the opportunity to enroll in an all-expenses-paid master’s program designed to “rival the Rhodes scholarship in prestige and influence.” At $300 million–including $100 million of Schwarzman’s own money–the program’s endowment is already slated to far outstrip the $203 million Rhodes fund.

The scholarship has attracted an impressive roster of backers, counting Ivy League presidents, business executives, former heads of state, and other powerful names among its many advisors and funders. Adding his endorsement alongside two former secretaries of state, current Secretary John Kerry lauded the program as “a terrific one,” thanking Schwarzman for his “vision and commitment” in a video address filmed specially for the website. Yale president Richard Levin, echoing a common theme among the endorsers, gushed: “The U.S.-China relationship has never been more important, which makes this program much needed and timely.” Boeing’s chairman, president and CEO W. James McNerney, Jr. threw in his company’s support “because it will help develop future leaders with global sensibilities and further strengthen the ties between our two countries.”

To be clear: the ties and relationships they’re discussing here are business ones. Many of the Schwarzman scholarship’s top donors have lucrative interests in China, where government regulators still retain extensive control over foreign companies’ access to markets. As the New York Times notes, Schwarzman’s personal role will “raise his political profile in China,” giving him and Blackstone “increased access to Chinese leaders.” The second-biggest donor for the program is BP, among China’s largest foreign investors, with nearly $5 billion tied up in fossil fuel extraction and chemical processing plants. Other top donors include Boeing (China is the second-largest aircraft market), Caterpillar (China is the world’s top construction market), and an array of big banks seeking expanded access to China’s state-owned financial sector.